WT/WGTGP/W/22
Page 1

World Trade
Organization / RESTRICTED
WT/WGTGP/W/22
7 April 1999
(99-1385)
Working Group on Transparency
in Government Procurement / Original: English

apec non-binding principles on government procurement: accountability and due process

Communication from Hong Kong, China

The following communication, dated 29 March 1999, has been received from MissAdelineWong of Hong Kong, China, in her capacity as Chair of the APEC Government Procurement Experts Group.

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I am writing in connection with the APEC Government Procurement Experts Group (GPEG), which was established in 1995 to consider ways to increase transparency of, and liberalize, government procurement markets in accordance with the Osaka Action Agenda adopted by APEC Economic Leaders in 1995.

In accordance with its action plan, the GPEG started the development of a set of nonbinding principles on government procurement in 1997. The GPEG developed in 1997 a set of elements pertaining to the principle of transparency in government procurement and a list of practices illustrating how they could be implemented. On behalf of the GPEG, I forwarded on 6December1997 these elements and illustrative practices to the WTO Working Group on Transparency in Government Procurement for reference at the study phase (documentWT/WGTGP/W/11).

Since then, the GPEG has continued its work on developing the set of nonbinding principles on government procurement. At its recent meeting on 4February1999, the GPEG developed the elements of the principle of accountability and due process and a list of illustrative practices, and agreed to forward them to the Working Group on Transparency in Government Procurement for reference. A copy of these elements and illustrative practices is reproduced below.

I would like to stress that these elements of accountability and due process and illustrative practices are nonbinding, and shall not prejudice the position of individual APEC member economies in the discussion on transparency in government procurement in the WTO.

apec government procrement experts group

non-binding principles on government procurement:

accountability and due process

Introduction

  1. Under the APEC collective action plan on government procurement (GP), a set of nonbinding principles on GP will be developed for adoption by members on a voluntary basis. The Government Procurement Experts Group (GPEG) has agreed to aim to complete the development of the nonbinding principles by 1999. So far, the GPEG has identified the elements of and illustrative practices on the principles of transparency, value for money, open and effective competition and fair dealing.
  2. At its ninth meeting on 4February1999, the GPEG further identified the elements pertaining to the principle of accountability and due process, and examples illustrating how these elements could be put into practice.
  3. As with the principles previously discussed and agreed by the GPEG, the principle of accountability and due process to be developed by the GPEG is nonbinding. Individual member economies are in the best position to decide on the applicability of individual elements to them, taking into account the specific characteristics of their economy and the costs and benefits of adopting specific measures. The examples on practices included in this paper represent some of the possible ways to give effect to the elements of accountability and due process identified in this paper, and are not intended to be prescriptive or exhaustive. Also, the elements and illustrative practices to be developed by the GPEG should not and will not prejudice the WTO discussions on GP nor the positions taken by member economies in the WTO.

Elements of accountability and due process

  1. The general principle is that government procuring agencies and individual procuring personnel should be, and are seen to be, accountable to their governments, the end users, the public and suppliers for the efficient, cost-effective and fair conduct of their procurement; and that mechanisms for scrutiny of the procurement process and avenues/channels for review of complaints should be available.

Procurement process

  1. Governments and individual agencies should establish and make known clear procurement laws/regulations/policies, practices and procedures; and procuring agencies and personnel should follow them without intentional or negligent infraction throughout the entire procurement process.

Record keeping

  1. Proper record should be kept of the entire procurement process, including decisions and actions taken during the procurement process and the reasons for taking them, to the extent that is sufficient to justify the decisions and actions taken. These records should be retained for a predetermined period.
  2. In practice, matters that should be documented include:
  • specifications of the items/services to be procured;
  • approval to spend public moneys;
  • selection of procurement methods;
  • criteria for evaluating and selecting tenders;
  • discussions with potential tenderers before tenders close;
  • opening and authentication of the tenders received;
  • names of the tenderers who have participated in tendering;
  • contents of invalid tenders and reasons;
  • clarification of tenders or other discussions with tenderers during tender evaluation;
  • decisions on selections of tenders;
  • authorization and signing of contracts; and
  • reasons for varying a contract.

Independent scrutiny

  1. Scrutiny mechanisms should be put in place to support and ensure accountability and due process. Such mechanisms:
  • should operate in ways that are independent, according to their circumstances, scope and objectives, and are not subject to the authority, control or influence of scrutinized entities; and
  • should treat, and are seen to treat, all parties even-handedly and fairly.
  • In practice, such mechanisms may include:
  • management controls and internal audit procedures designed to ensure efficiency, economy and probity in the agency's use of public resources;
  • internal scrutiny of actions or decisions of a procurement official or section within an agency by another official or section of that agency; and
  • scrutiny by another government agency, which may or may not be independent of government influence, such as an Ombudsman and government audit organization.

Review mechanism

  1. Mechanisms should be put in place for handling complaints about procurement processes or alleged breaches of procurement laws/regulations/policies/procedures which cannot be resolved through direct consultation with the procuring agency in the first instance. Such mechanisms should provide independent, impartial, transparent, timely and effective procedures for the review of such complaints or alleged breaches by suppliers who have, or have had, an interest in the procurement concerned.
  2. In practice, this can include:
  • designating a review body/person for the purpose of an objective and impartial review of the complaints/alleged breaches. The review body may take the form of a court, an independent review body, a government agency not directly involved in the procurement, or a reputable private sector arbitration/mediation service. The review body should have no interest in the outcome of the procurement and its members should be secure from external influence during the review;
  • providing for correction of the breaches or compensation for the loss or damages caused, which may be limited to the costs of tender preparation or protest;
  • making information on the review mechanism including its scope, objectives and operations; and the rights and obligations of all parties involved readily available and accessible to suppliers; and
  • making the review mechanism available equally to domestic and foreign suppliers.

Openness and transparency

  1. The procurement process should be open and transparent.
  2. Openness and transparency support and help ensure accountability and due process. In practice, this can be achieved by acting consistently with the transparency principles and practices, including those in the area of award of contracts, identified by the GPEG earlier.

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